Indices lose ground as major global indices decline substantially

23 January 2006

Indices opened sharply lower as markets across the globe traded weak on higher crude prices and corporate controversies. Some of the quarterly numbers announced after Friday's close were also not up to expectations.

Asian markets had a very bad session today following the US market slide on Friday. Japan, South Korea and Indonesia lost around 2 per cent each while Hong Kong and Singapore declined more than a per cent each.

The indices recovered from their early lows and went close to Friday's closing levels by mid-morning. They declined again and were stuck within a range though there was some volatility in afternoon trades.

Jet Airways was the biggest loser among Nifty stocks after the airline announced disappointing results for the December quarter. The stock closed with losses of nearly 8 per cent.

Technology stocks declined and were responsible for most of the losses in the indices. Infosys and Satyam lost around 2.5 per cent each while HCL Technologies lost close to 3 per cent.

HDFC, Gail, HPCL, Tata Chemicals and Tata Motors were the other major losers among index stocks.

ITC was the best performer following excellent quarterly numbers announced after market hours on Friday. The stock added more than 3 per cent higher. Hindustan Lever gained close to a per cent.

Zee Tele, ABB, Shipping Corporation and BHEL were among the other major gainers among frontline stocks. ONGC gained over 0.5 per cent, providing some support to the indices.

Sensex closed at 9465, a loss of 56 points, and the Nifty at 2884, lower by 17 points. Nifty January futures closed at a premium of 3 points to the spot index.

Oil prices are maintaining their high levels today. After touching $69 in Asian trades, March futures are trading well above the $68 mark in early European trades today.

Tata Steel has reported lower net profits for the quarter ended December despite selling higher volume as compared to the prior year quarter. Consolidated net profits were Rs825.75 crore on total revenues of Rs4,961.64 crore for the quarter.

The board of Reliance Industries has approved an investment of $750 million to set up a chain of retail stores. The investments in the new business would be made through a subsidiary of the company.

Reliance is expected to start retail operations in the state of Gujarat shortly which would be expanded to other parts of the country in future.

Reliance Petroleum would set up an export-oriented 27 million tonnes per annum oil refinery and petrochemical facilities in the proposed Jamnagar SEZ. The company said total investments in these new facilities would be around $6 billion. The board has also approved a proposal to raise funds through an equity issue by Reliance Petroleum.

There are also unconfirmed media reports that Reliance would spend up to Rs5,000 crore to start commercial production of coal-bed methane (CBM) by the year 2008. The company has around 5 CBM exploration blocks and had announced a gas find recently in one of the blocks in Madhya Pradesh.

Net profits of Jet Airways for the quarter ended December declined by more than half due to lower passenger loads and higher fuel costs. Profits for the quarter were at Rs61.01 crore as compared to Rs129.63 crore during the pervious year. Total revenues for the quarter were Rs1,499.03 crore including other income of Rs20.78 crore.

During the quarter, the ratio of full-priced to discounted tickets for Jet Airways was almost 50:50 as a couple of low cost airlines stepped up the price war. The airline said load factor for the current quarter may remain at the same levels. Jet Airways said it is not planning to start services on new international routes this quarter.

Jet Airways said the cash payout for the Sahara acquisition may be lower than $500 million. The company is also planning to raise between $750 million and $1 billion from equity or debt issues.

Canara Bank has reported a net profit of Rs356.29 crore for the December quarter, an increase of 30 per cent from the prior year quarter figure of Rs273.98 crore. Total income for the quarter was Rs2,551.22 crore including other income of Rs311.15 crore.

Oriental Bank of Commerce has reported a net profit of Rs143.42 crore for the December quarter as compared to Rs128.15 crore for the prior year quarter. Total income for the quarter was Rs1,176.14 crore including other income of Rs126.27 crore.

BHEL would set up a 500 MW crude oil fired power plant in Sudan on turnkey basis. The project is estimated to cost $500 million.

Mid-Cap Action

Mid-caps were subdued today after the strong gains of the last 2 sessions of the previous week. There was no selling pressure in mid-caps like in large caps and the mid-cap index drifted around Friday's closing levels. The CNX Mid-Cap index lost 3 points and closed the day at 4221.

Kotak Mahindra Bank has reported a net profit of Rs96.44 crore for the December quarter as compared to Rs48.13 crore for the prior year quarter on a consolidated basis. Total income for the quarter was Rs370.09 crore including other income of Rs71.58 crore.

Reliance Capital has reported a net profit of Rs65 crore for the December quarter as against Rs24 crore for the prior year quarter on a stand alone basis. Total income for the quarter was at Rs83 crore as against Rs72 crore. On a consolidated basis, the company has reported a net of Rs67 crore on revenues of Rs150 crore for the latest quarter.

Shopper's Stop has reported a net of Rs11.7 crore for the December quarter on total revenues of Rs196.29 crore.